With Hard Asset Prices Plummeting, What's Next for the OA Market?
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So, gold prices have plunged more than $500/oz. since hitting their all-time high in September 2011, while silver prices have plummeted 52% since April 2011. Commodity prices are at a 9-month low (and look to be heading lower), while the Commodity Research Bureau (CRB) Index is 40% off its 2008 all-time high. The U.S. Dollar Index has been rallying since May 2011 and is not far away from highs last seen in 2010. Housing prices have firmed of late, though, of course, they were starting from a very depressed base. OA prices of course surged to records last year and, though they may have backed off a bit from last summer's frenzied levels, remain near all-time highs (at least for the most coveted material).

 

My question is: how long before the deflationary pulse running through the financial markets and the real economy spills over into our hobby? Now, I'm sure that most people in the hobby don't actively track the price of gold or oil or copper or grains. But, the fact is, many investors in those markets bought for similar reasons people feel confident about buying OA - (1) prices have been going up, so I'm going with the flow; (2) I'm not earning anything on cash in the bank, so the opportunity cost is minimal; and (3) I'd rather own something tangible after what's happened in the stock and real estate markets over the past 5-7 years; and (4) the Fed is printing funny money, the dollar is going down the toilet and I'd rather own something tangible as a store of value or investment.

 

Anyway, the Fed is still printing money and interest rates are still de minimus (the dollar is strengthening anyway, though), but hard asset prices are tumbling nonetheless. How long before the desire to hold cash outweighs the desire to own art at current prices? Personally, I'd be more inclined to put my marginal dollar into gold at 2010 prices than OA at 2013 prices, except for exceptional pieces that fill real holes in my collection. Even if it's not an either/or decision for most collectors, I'm sure that there is a general awareness that OA is at record prices even while prices in other parts of both the financial and real economy are tumbling...surely that will eventually lead to some cognitive dissonance and disconnect at some point. I don't think nostalgia always trumps economic reality - I think people are more keenly aware of prices than ever with where the market is these days.

 

I know that I, for one, will be tempering my bidding for the May auctions if this hard asset deflation continues.

 

Thoughts? :popcorn:

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for OA, will it really be a depression of prices, or a price correction?

 

I think the latter, and then see a steady climb back up.

 

As someone who's still trying to create their collection, I'd be happy to see this correction. I am not in the high end, but the low-middle pond that I play in has followed suit as well IMO.

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You just reminded me to check spot silver and gold this morning and holy smokes!

I have some calls and emails to make.

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The low interest rates are helping out with various obvious things like mortgage refis and CCard consolidation. The American Consumer is, in general, reducing its debt. This will free up cash.

 

But, a persistent aversion of those same American Consumers to risk their funds in the Stock Market (despite the current trumpeting headlines) is making them park those funds in liquid savings, even though the return is abysmal. (A tenth of a percent is a typical savings interest rate now, when everyone on this board is probably old enough to recall a 5 percent rate at some point in their lives) It's a terrible time to be a money saver. Sooner or later, that money will start to get restless.

 

Absurd price fluctuations (i.e. a 'bubble') is almost always driven by speculators, many of whom know little about the market they're pouring their money into.

 

My opinion: I think our hobby doesn't have the infrastructure (facilitators or documentation) to accommodate a meaningful influx of rookie speculators. The growth we've seen is more-or-less real.

 

Andrew

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Outside of a few crazy macfarlane prices....this market still seems like small potatoes to me (overall). It's still possible to get impotortant and and influential original peices for a few thousand dollars..sometimes even a few hundred. Try getting an impotant peice of post war - contemporary art for that. This also a fairly new area of collecting, its only starting to grow and become appealing to a broader audience from what i can tell. I personally think there will be a small dip or correction and may be holding back a little in the next auction as well.

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My answer as it always is involving where markets are heading is that I simply don't know; if I did I would be a lot wealthier than I am now.

 

I have been extremely confused by the markets as of late and feel like I have no idea where anything is heading lately.

 

Regarding gold and silver there has been a huge influx of buyers in the 1700+/34+ levels of people looking to strike it rich.

 

Regarding the OA market I would have to agree with this; but would tread VERY lightly.

 

 

 

Absurd price fluctuations (i.e. a 'bubble') is almost always driven by speculators, many of whom know little about the market they're pouring their money into.

 

My opinion: I think our hobby doesn't have the infrastructure (facilitators or documentation) to accommodate a meaningful influx of rookie speculators. The growth we've seen is more-or-less real.

 

Andrew

 

 

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I will admit to having next to no understanding of the "markets" or economy but i understand it enough to feel that i'm not the biggest fan of the way the system works...so that said, i'm still a believer in hard assets over what i think is invisible money that can disappear in a moment's notice.

 

A lot of friends and family lost a lot of money when the economy collapsed whereas my collectibles investments continued to rise and sold at much higher values than what i paid, effectively helping me out of a few tough financial years. Now that my financial situation looks to be stabilizing, i will continue to "invest" in what i think are decent collectibles (not the high end, not the low end, but quality in the middle - and not just OA) and in paying off my house. At 35, the thought of not having a mortgage in five years seems the most sensible retirement plan i can think of. And i can fill my house with cool and valuable stuff along the road!

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I have a lot more confidence in OA than in comic books in terms of value. I've been selling off my silver age comic collection runs of all the major marvel titles mid grade non cgc that ive collected over the last 20-25 years: and other than key books (which really went crazy) ive pretty much gotten back about 25% less than what i paid for them NOT adjusted for inflation. so dollar for dollar between the keys and commons, i maybe broke even......I wouldnt be surprised if there are more people like myself who realize they are never going to read their collection again and are tired of having boxes of comics that need to be stored in the dark, when they can pick up a few nice original peices from their favorite books and be able to put them on the wall and look at them.

 

I think the comic collecting area is over valued and the OA area is still under valued.

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So, gold prices have plunged more than $500/oz. since hitting their all-time high in September 2011, while silver prices have plummeted 52% since April 2011.

Thoughts? :popcorn:

 

 

 

But wouldn't you say that metals, especially Gold, were bloated to begin with and that the bloating combined with a short term panic sell are what put the numbers where they are?

 

It was too high to begin with, but it's nowhere as bad as the current figure.

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So, gold prices have plunged more than $500/oz. since hitting their all-time high in September 2011, while silver prices have plummeted 52% since April 2011. Commodity prices are at a 9-month low (and look to be heading lower), while the Commodity Research Bureau (CRB) Index is 40% off its 2008 all-time high. The U.S. Dollar Index has been rallying since May 2011 and is not far away from highs last seen in 2010. Housing prices have firmed of late, though, of course, they were starting from a very depressed base. OA prices of course surged to records last year and, though they may have backed off a bit from last summer's frenzied levels, remain near all-time highs (at least for the most coveted material).

 

My question is: how long before the deflationary pulse running through the financial markets and the real economy spills over into our hobby? Now, I'm sure that most people in the hobby don't actively track the price of gold or oil or copper or grains. But, the fact is, many investors in those markets bought for similar reasons people feel confident about buying OA - (1) prices have been going up, so I'm going with the flow; (2) I'm not earning anything on cash in the bank, so the opportunity cost is minimal; and (3) I'd rather own something tangible after what's happened in the stock and real estate markets over the past 5-7 years; and (4) the Fed is printing funny money, the dollar is going down the toilet and I'd rather own something tangible as a store of value or investment.

 

Anyway, the Fed is still printing money and interest rates are still de minimus (the dollar is strengthening anyway, though), but hard asset prices are tumbling nonetheless. How long before the desire to hold cash outweighs the desire to own art at current prices? Personally, I'd be more inclined to put my marginal dollar into gold at 2010 prices than OA at 2013 prices, except for exceptional pieces that fill real holes in my collection. Even if it's not an either/or decision for most collectors, I'm sure that there is a general awareness that OA is at record prices even while prices in other parts of both the financial and real economy are tumbling...surely that will eventually lead to some cognitive dissonance and disconnect at some point. I don't think nostalgia always trumps economic reality - I think people are more keenly aware of prices than ever with where the market is these days.

 

I know that I, for one, will be tempering my bidding for the May auctions if this hard asset deflation continues.

 

Thoughts? :popcorn:

 

Y'know, this is a great way to scare off some folks from bidding in the upcoming auctions ^^

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Y'know, this is a great way to scare off some folks from bidding in the upcoming auctions ^^

 

Ha ha ha

 

:roflmao:

 

there sure are a lot of nice stuff in upcoming auctions

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While the current deflation is disturbing to any investor, a two day gold dive doesn't change the rules of the game. Anyone who believed in oa last week shouldn't change their mind just because of this.

 

That said, if gold continues to drop, or the US GDP shows an extended contraction, or the stock market plunges 40%, you can be sure oa will go down as well. No investment is protected from the uncertainty of the world.

 

For my part, I would see a drop in oa prices as a mixed blessing. As an acquirer, my money would buy more art. But most of the pieces that I covet are firmly placed in private collections, and without the market heat many sellers will decide to hang on to their better stuff.

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So, gold prices have plunged more than $500/oz. since hitting their all-time high in September 2011, while silver prices have plummeted 52% since April 2011. Commodity prices are at a 9-month low (and look to be heading lower), while the Commodity Research Bureau (CRB) Index is 40% off its 2008 all-time high. The U.S. Dollar Index has been rallying since May 2011 and is not far away from highs last seen in 2010. Housing prices have firmed of late, though, of course, they were starting from a very depressed base. OA prices of course surged to records last year and, though they may have backed off a bit from last summer's frenzied levels, remain near all-time highs (at least for the most coveted material).

 

My question is: how long before the deflationary pulse running through the financial markets and the real economy spills over into our hobby? Now, I'm sure that most people in the hobby don't actively track the price of gold or oil or copper or grains. But, the fact is, many investors in those markets bought for similar reasons people feel confident about buying OA - (1) prices have been going up, so I'm going with the flow; (2) I'm not earning anything on cash in the bank, so the opportunity cost is minimal; and (3) I'd rather own something tangible after what's happened in the stock and real estate markets over the past 5-7 years; and (4) the Fed is printing funny money, the dollar is going down the toilet and I'd rather own something tangible as a store of value or investment.

 

Anyway, the Fed is still printing money and interest rates are still de minimus (the dollar is strengthening anyway, though), but hard asset prices are tumbling nonetheless. How long before the desire to hold cash outweighs the desire to own art at current prices? Personally, I'd be more inclined to put my marginal dollar into gold at 2010 prices than OA at 2013 prices, except for exceptional pieces that fill real holes in my collection. Even if it's not an either/or decision for most collectors, I'm sure that there is a general awareness that OA is at record prices even while prices in other parts of both the financial and real economy are tumbling...surely that will eventually lead to some cognitive dissonance and disconnect at some point. I don't think nostalgia always trumps economic reality - I think people are more keenly aware of prices than ever with where the market is these days.

 

I know that I, for one, will be tempering my bidding for the May auctions if this hard asset deflation continues.

 

Thoughts? :popcorn:

 

Agree with most of what you said. Almost always do for that matter. Because of our fondness of the hobby, we're inclined to put our money there. But, when it comes to purely investing, don't we want the most bang for our buck? Didn't you recently say at these prices, that you would consider putting some money into a vintage auto? I like the sound of that, being a car guy too. I am not intimately familiar with that market, so I don't know what would be a good investment, besides the obvious vehicles, but I know I would get as much of a thrill driving around in some cool car as I would displaying OA. Getting back to the OA looking at just the upper lower segment of the hobby, that being, lets say, around 50k to 125-150k, is it fair for me to say, that in quite a few circumstances, we can currently invest that money in something else, and see better (at least, short term) returns? I am not too familiar with other collectibles, so I don't know for sure, I just wouldn't be surprised. I am fairly confident that a savvy investor could do better, at certain times, and in the short term, with certain commodities. Which ones, I don't know. Maybe oil, soy, ferrous metals, I am not sure, but I am confident, there are other traditional investments out there that can, in the short term, out perform a fair amount of OA in that price range. As far as what is going on some of these pieces, I just shake my head. Unless I don't see something, I don't get it, from a investment standpoint. Would I pay 600k plus for that cover? no way. But, imho, is the X-man #1 splash worth 600k? Yep! That being said, OA got a relatively late start, and I am a firm believer that certain pieces of OA, in the mid to long term are excellent investments, (will be in museums at some point in the future) and will be, mostly, on par with many of the better mid and long term investments that are out there. But definitely, one has to be cautious in this market. How high is the ceiling for some of the better pieces? it may be very high.

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Outside of a few crazy macfarlane prices....this market still seems like small potatoes to me (overall). It's still possible to get impotortant and and influential original peices for a few thousand dollars..sometimes even a few hundred. Try getting an impotant peice of post war - contemporary art for that. This also a fairly new area of collecting, its only starting to grow and become appealing to a broader audience from what i can tell. I personally think there will be a small dip or correction and may be holding back a little in the next auction as well.

 

The market is still maturing, but, and maybe I am not looking in the right places, but what important and influential pieces can one get for a couple of thousand or less? Are you talking about modern art that might one day be in that category, or pieces that are already established? I have not seen anything from the copper age back that could be had for those prices. Again, maybe I am not looking properly, I just don't see it.

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I'm not sure if the Original Art market correlates to the price of gold/silver nor the stock market, since those commodities are sold as commons and it's easy to buy and sell at somewhat fixed or stable prices for the moment, which are to a degree predictable.

 

With Original Art (as well as comic books and other unique collectibles) the "book (price guide) value" means nothing if there's no buyer to match what a seller wants for price, and a buyer has to find a seller and vice versa, a seller must find a buyer. That's probably the most dangerous aspect of investing in collectibles is the inability to liquidate easily. Also, "junk is junk" and where with certain commodities, you can sell, even at a loss (and to offset gains), for the most part, short of donating or taking pennies on the dollar, if nobody's interested in acquiring substandard inventory, then you're stuck with it. Also, for high valued items, you don't want to suddenly flood the market with let's say your entire collection of a specific title or artist, then inherently that could impact your ability to maximize your profit since there's a finite amount of buyers and some have a finite amount of money, so if you spread the interest in let's say "John Byrne Uncanny X-Men" pages from a single page to offering a dozen different ones at once, the focus can be spread and impact what you could potentially have made by slowly releasing them for auction one at a time.

 

That's the hardest part about having and holding collectibles as financial assets, the speed and strategy of liquidation to maximize profitability.

 

I think the Original Art market is a bit soft generally speaking for sales on the mid/lower valued pieces which are still good pieces, but hover in the $3,000 or lower range. I think there's actually a good buying opportunity now to take advantage of the fact that in some situations, there's less active interest in auctions like eBay, Heritage, Comic Link, etc. and some of the moderately priced pieces aren't commanding huge dollars.

 

To a degree, I don't really see "product dumping" which would cause a crash. I think most Original Art collectors have beyond the monetary investment, a bit of an emotional investment and refuse to sell below a certain price they want. Also, most Original Art collectors are a bit more affluent, so their level of disposable income is higher, so there's less "firesales" out of distress to liquidate out of financial strife or desperation (unless raising funds to finance another original art buying opportunity).

 

The higher end artwork, I think, or I perceive, are still commanding good dollar (maybe not record breaking top dollar) via auctions for pieces in the $10k + range. I think no matter what, there's a sector within the hobby of those financially elite who can afford a good buying opportunity and there's enough of 'em out there that a piece that's truly coveted will never sell for dirt cheap or plummet.

 

However, for some of the record breaking pieces, such as recent sales of the past years of Frank Miller or Todd McFarlane material, might find the buyer in a position, should they want to sell their art, will probably take a loss, and maybe even a substantial one. In those cases, I think what those pieces sold for were "over paid" for per peer market value of comparable pieces, even though they're all "one of a kind" so it's hard to really state what anything is truly "worth" (whatever someone is willing to pay).

 

I still see Original Art as a really solid commodity ("cardboard/paper gold") out there to fans who collect and sort of invest (anyone who spends thousands on a piece of paper, and buys a lot, is in part investing once a collection is valued over $10k in my opinion), so no matter what they have something they can enjoy, and the upside is they are holding "one of a kind" material that hopefully, if they study the market well enough will at minimum "break even" if they need to sell, but on the upside can see strong multiples on their return on investment if all planets align properly of the laws of supply and demand.

 

 

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The one thing that always interests me in the commodities and real world market influence on OA comparisons that Gene throws out is the concept of supply.

 

Vintage OA supply is nowhere near as infinite as most commodities. Kirby can't be exhumed, time warped back to 1966 and create another Marvel core title with Stan. The market is so much smaller and in order for their to be supply, someone has to want to sell . So I always ask myself in a collectibles market with an abundance of seemingly new material around, especially in the OA market where there are not 4 different versions of each Watchmen cover, where is the material coming from and why are the people who own the material deciding to sell.

 

As I've said before most, if you do not factor in those selling to buy other material, people who are selling this material value cash, more than their OA as an asset. That is an important thing to consider for me as a buyer because if I choose to buy their OA then I am essentially saying that I value OA more than cash as an asset. The higher the degree of investment in a purchase (meaning the purchase was lower in the nostalgia scale) the greater you are expressing the OA over cash preference as an asset.

 

I enjoy Gene's posts too, however I think the May Heritage offering may really put his rational market understanding of a down turn vs.nostalgic acquisition in that downturn to the test ;)

 

2c

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..........

 

My question is: how long before the deflationary pulse running through the financial markets and the real economy spills over into our hobby? Now, I'm sure that most people in the hobby don't actively track the price of gold or oil or copper or grains. But, the fact is, many investors in those markets bought for similar reasons people feel confident about buying OA - (1) prices have been going up, so I'm going with the flow; (2) I'm not earning anything on cash in the bank, so the opportunity cost is minimal; and (3) I'd rather own something tangible after what's happened in the stock and real estate markets over the past 5-7 years; and (4) the Fed is printing funny money, the dollar is going down the toilet and I'd rather own something tangible as a store of value or investment.

..........

 

I read your post and take it that you are mainly referring to the top tier of OA. Is that right? It doesn't feel like the mid or low end stuff is going to see any large corrections at current prices.

 

 

 

I wouldnt be surprised if there are more people like myself who realize they are never going to read their collection again and are tired of having boxes of comics that need to be stored in the dark, when they can pick up a few nice original peices from their favorite books and be able to put them on the wall and look at them.

 

I think the comic collecting area is over valued and the OA area is still under valued.

 

You can add me to that pile.

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Outside of a few crazy macfarlane prices....this market still seems like small potatoes to me (overall). It's still possible to get impotortant and and influential original peices for a few thousand dollars..sometimes even a few hundred. Try getting an impotant peice of post war - contemporary art for that. This also a fairly new area of collecting, its only starting to grow and become appealing to a broader audience from what i can tell. I personally think there will be a small dip or correction and may be holding back a little in the next auction as well.

 

The market is still maturing, but, and maybe I am not looking in the right places, but what important and influential pieces can one get for a couple of thousand or less? Are you talking about modern art that might one day be in that category, or pieces that are already established? I have not seen anything from the copper age back that could be had for those prices. Again, maybe I am not looking properly, I just don't see it.

 

I guess it depends what you mean by "important & influential" but for example folks have been picking up Boys Ranch pages by Simon & Kirby (and mostly Kirby) in the 2K range. Some from the very first story, and Boys Ranch was certainly an influential title. Staying with Kirby, you can still get various 70's panel pages, even 4th World, in the same range. Silver Age superhero pages by Heck and Colan, not the best ones but certainly good ones. JLA large art panel pages. Kane Green Lantern & Atom. Lots of stuff.

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So, gold prices have plunged more than $500/oz. since hitting their all-time high in September 2011, while silver prices have plummeted 52% since April 2011. Commodity prices are at a 9-month low (and look to be heading lower), while the Commodity Research Bureau (CRB) Index is 40% off its 2008 all-time high. The U.S. Dollar Index has been rallying since May 2011 and is not far away from highs last seen in 2010. Housing prices have firmed of late, though, of course, they were starting from a very depressed base. OA prices of course surged to records last year and, though they may have backed off a bit from last summer's frenzied levels, remain near all-time highs (at least for the most coveted material).

 

My question is: how long before the deflationary pulse running through the financial markets and the real economy spills over into our hobby? Now, I'm sure that most people in the hobby don't actively track the price of gold or oil or copper or grains. But, the fact is, many investors in those markets bought for similar reasons people feel confident about buying OA - (1) prices have been going up, so I'm going with the flow; (2) I'm not earning anything on cash in the bank, so the opportunity cost is minimal; and (3) I'd rather own something tangible after what's happened in the stock and real estate markets over the past 5-7 years; and (4) the Fed is printing funny money, the dollar is going down the toilet and I'd rather own something tangible as a store of value or investment.

 

Anyway, the Fed is still printing money and interest rates are still de minimus (the dollar is strengthening anyway, though), but hard asset prices are tumbling nonetheless. How long before the desire to hold cash outweighs the desire to own art at current prices? Personally, I'd be more inclined to put my marginal dollar into gold at 2010 prices than OA at 2013 prices, except for exceptional pieces that fill real holes in my collection. Even if it's not an either/or decision for most collectors, I'm sure that there is a general awareness that OA is at record prices even while prices in other parts of both the financial and real economy are tumbling...surely that will eventually lead to some cognitive dissonance and disconnect at some point. I don't think nostalgia always trumps economic reality - I think people are more keenly aware of prices than ever with where the market is these days.

 

I know that I, for one, will be tempering my bidding for the May auctions if this hard asset deflation continues.

 

Thoughts? :popcorn:

 

Y'know, this is a great way to scare off some folks from bidding in the upcoming auctions ^^

 

hm

 

his ruse has been discovered lol:insane:

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Outside of a few crazy macfarlane prices....this market still seems like small potatoes to me (overall). It's still possible to get impotortant and and influential original peices for a few thousand dollars..sometimes even a few hundred. Try getting an impotant peice of post war - contemporary art for that. This also a fairly new area of collecting, its only starting to grow and become appealing to a broader audience from what i can tell. I personally think there will be a small dip or correction and may be holding back a little in the next auction as well.

 

The market is still maturing, but, and maybe I am not looking in the right places, but what important and influential pieces can one get for a couple of thousand or less? Are you talking about modern art that might one day be in that category, or pieces that are already established? I have not seen anything from the copper age back that could be had for those prices. Again, maybe I am not looking properly, I just don't see it.

 

I guess it depends what you mean by "important & influential" but for example folks have been picking up Boys Ranch pages by Simon & Kirby (and mostly Kirby) in the 2K range. Some from the very first story, and Boys Ranch was certainly an influential title. Staying with Kirby, you can still get various 70's panel pages, even 4th World, in the same range. Silver Age superhero pages by Heck and Colan, not the best ones but certainly good ones. JLA large art panel pages. Kane Green Lantern & Atom. Lots of stuff.

 

Ogden whitney herbie peices for one. at the recent wonder con i saw some decent early tales of suspense kirby and heck pages with cap and ironman for 2800-3200, and there is all the late 50's kirby art (mostly non hero but important none the less going in the 2000-5000 range. 60's Kane green ;lantern can be had for 2500 and under....60's marie severin.....you get my point i think

 

 

 

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